Filing Suit on Behalf of the Government for Fraud – The Qui Tam Lawsuit

HUGHES ELLZEY, LLP – LAWYERS FOR WHISTLEBLOWERS

Many employees, whether they work for a government entity or private business, will witness some form of wrongdoing or illegal activity perpetrated by their employers. These same employees have either thought about reporting employer misconduct but have balked at doing so for fear of retaliation or losing his or her job. It is important for all employees to know there are various state and federal laws that protect employees who inform attorneys or law enforcement about their employer’s illegal acts. These individuals are called “whistleblowers.”

“Whistleblower” can mean any person who discovers and reveals misconduct by his or her employer or another business or entity. Misconduct may be in the form of breaking the law, committing fraud, or corruption. Hughes Ellzey, LLP takes particular interest in representing employees of private companies who have witnessed or have evidence of their employer defrauding the Federal Government. These individuals are protected by the law and may be entitled to compensation for the information they bring to light, as is detailed below.

Qui Tam – Protecting the Private Non-government Employee

The False Claims Act (31 U.S.C. § 3729) is a federal law that includes a provision that allows people who are not affiliated with the government to file actions against government contractors for defrauding the government. The Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur literally means, “[h]e who sues in this matter for the king as well as for himself. Those who are closest to an active scam are often the first to uncover it. The information these brave individuals can provide to the government is almost always the most valuable evidence the government will have against the offending party. In most cases, the government would not have been aware of any wrongdoing had it not been for the information the whistleblower provided, and initiative and courage of the whistleblower herself.

Whistleblowers who file suit under the Act stand to receive a portion (generally 15 to 30 percent) of any jury award or settlement amount recovered on behalf of the government. This, of course, was meant to provide private citizens some incentive to aid the government in preventing fraud and hold unscrupulous contractors accountable. Furthermore, Qui Tam actions are filed under seal, so the identity of the informant (legally termed “Relator”) is never revealed during the course of the litigation.

The Act provides a very useful legal tool for private individuals to inform about and help prevent fraud on the federal government. What sort of acts amount to fraud against the government? Most Qui Tam cases fall under the following categories:

Fraud in the inducement or false negotiation. This involves false statements or illegal acts that occur when a company is bidding for a government contract. For example, the bidder pays a kickback in exchange for being awarded the government contract.

This happens when a company fails to deliver goods or services that the government paid for, or overbills for goods or services delivered.

False Certification. This happens when a party receives government program benefits by making false statements about its eligibility for these benefits.

Reverse False Claim. This involves a party making a false record in order to reduce its financial obligation to the government.

Substandard Product or Service. This happens when a supplier of goods or services replaces a product or service called for in a contract with the government with a lower quality good or service.

The most typical claims filed with insider knowledge involve health care overbilling/fraud, military contracts, tax fraud, and other government spending programs. For example, a Qui Tam action is available to an employee of a private medical clinic who discovers that clinic physicians are overbilling Medicare for certain procedures or examinations. Another common example might involve an employee of a defense contractor or aircraft manufacturer discovers his or her company’s accounting irregularities pertaining to overcharging the government for military weaponry.

What do you do if you discover your employer is defrauding the government? You should contact an experienced whistleblower attorney as soon as possible, as individuals are forbidden under the False Claims act from representing themselves in a Qui Tam action. Furthermore, Qui Tam claims should be filed quickly in order to ensure preservation of evidence and to mitigate the damage being done to the government. If you are aware of a company that is involved in a scheme to defraud the government, you should contact Hughes Ellzey, LLP immediately. You may be entitled to compensation for helping to prevent further wrongdoing. It is important to note that Hughes Ellzey, LLP takes all Qui Tam cases on a contingency fee basis. This means the client pays no retainer, and Hughes Ellzey, LLP does not take a fee unless the client recovers a jury award or a settlement. In other words, the attorney takes an agreed-upon percentage of the recovery only if the Client settles or wins in trial. The client pays nothing out of pocket.

What happens after you hire an attorney? The attorney will file a lawsuit on behalf of the Relator against the offending party. The Relator essentially stands in the government’s shoes while her attorney notifies the Department of Justice of the Relator’s allegations of wrongdoing. Once the suit is on file, the Department of Justice, in conjunction with the U.S. Attorney for the district in which the suit was filed, have the option to intervene in the suit. If the government does intervene, it will notify the offender that the suit has been filed against the offender. Again, Qui Tam actions are filed under seal. The seal must be partially lifted to allow the government to give the offending party adequate notice of the claim. The seal that is in place after filing prohibits the defendant from disclosing even the mere existence of the case to anyone, including the defendant’s shareholders. The government then proceeds with discovery and prosecution of the case without ever disclosing the identity of the plaintiff or any facts.

The attorneys of Hughes Ellzey, LLP will be your advocate during each step of the litigation. We recognize that the decision to become a whistleblower is not an easy one. When researching lawyers for whistleblowers, please do not hesitate to contact us. we will provide you the best representation possible and work together with you to undo the wrong you discovered and so admirably brought to light.

About Hughes Ellzey, LLP.

We are a boutique litigation firm located in Houston, Texas focused on representing clients in individual claims, class actions, and group cases.